The percentage of people with disabilities who are employed increased to 47 percent from 41.3 percent in states with expanded Medicaid coverage while staying relatively constant in non-expansion states, according to new research.

Not only does this finding translate to greater opportunity and quality of life for people with disabilities, it could have cost-saving policy implications as non-expansion states consider whether to include work requirements along with expansion, according to the study, “Medicaid Expansion as an Employment Incentive Program for People With Disabilities,” published last month in the American Journal of Public Health.

Before the passage of the Affordable Care Act (ACA), one had to meet income requirements and be a child, pregnant woman, disabled, a senior or parent to a child in the program to qualify for Medicaid.

The ACA allowed states to expand Medicaid coverage to anyone with an income up to 138 percent of the poverty level. Expansion is largely federally funded and was originally mandatory. However, a U.S. Supreme Court decision in 2012 allowed states to choose whether to expand coverage.

Currently, 33 states and the District of Columbia have expanded Medicaid coverage. Three states — Idaho, Nebraska and Utah — are considering expansion either through ballot initiatives or legislation.

To qualify for Medicaid before expansion, people with disabilities were required to go through a disability determination process to prove that they were unable to work. They also had to meet both a monthly income limit of an average of 85 percent of the federal poverty level and a cap on their assets, causing many to have to spend down any money they had saved, to meet the requirements.

This presented a difficult decision for adults who were able to work in a limited capacity. “If you’re an adult facing a lot of poor health, and you can’t keep working at the same amount that maybe you were before, or maybe you’re working but that employer doesn’t provide employer-sponsored health insurance, enough to support your medical needs, the only way that you could qualify for Medicaid was via your disability,” said Kathleen Thomas, senior author on the new study and a research fellow with the University of North Carolina Chapel Hill’s Cecil G. Sheps Center for Health Services Research. This put disabled adults in a situation with little to no ability to earn or save money without risking losing their health coverage.

“I remember talking to someone who inherited a house, and she didn’t qualify for Medicaid if she owned the house,” Thomas said. Though Thomas said that the asset testing was intended to make sure only the neediest recipients were being covered, “the unintended consequence is that it’s pushed people to divest so much of their resources that they’re stuck and can’t rebuild their financial viability.”

Aware of the beneficial effects of increased employment and wary of people who might exploit the new system, some states have implemented work requirements along with Medicaid expansion. However, work requirements have thus far run into fiscal and legal woes.

“We’ve heard from states that it’s a significant administrative cost,” said Larisa Antonisse, a policy analyst with the Kaiser Family Foundation.

The state's technology system has been plagued by high-profile failures, and finding someone willing to head the department has proven challenging. "It keeps me up at night," Walz said in an interview.